Sao Paulo, Brazil – Biggest revenue segments for the Mexican petrochemicals market in 2014 were acrylonitrile-butadiene-styrene (ABS) and styrene butadiene rubber (SBR), according to a Frost & Sullivan report published on 6 July.
The main reason for this growth, said the report, is the steady stream of investments by automotive, electronics, and appliance companies, which are attracted to Mexico's low production costs and strategic geographic location.
According to the study, the SBS market is expected to be among the top performers, showing a compound annual growth rate (CAGR) of 8.7 percent from 2014 to 2020.
Frost & Sullivan reports that the Mexican petrochemicals market earned revenues of $1.06 billion in 2013 and estimates that the figure will reach $1.64 billion in 2020.
"While higher vehicle production is the main market driver for the petrochemical market, there is a marked trend toward making vehicles lighter to enhance movement and save fuel," said Frost & Sullivan energy & environmental industry analyst Mariana Guercia.
"This translates to higher demand for plastic materials to replace metal parts, but simultaneously, it also decreases the amount of rubber required per car," she added
The market, adds the report, has considerable government backing, despite intensive competition from other countries particularly in Asia.
"As Mexico has signed multiple trade agreements with various nations, manufacturers from most countries do not have to pay import taxes," noted Guercia.
"The low costs of establishing business stimulate foreign investments, especially in new plants and factories of automotive, appliances and electronics industries, which are the main end users of these resins."